Insights

Home Health Stocks Hit Record High

Posted on Wednesday, June 8, 2016 6:46 PM

For the second month in a row, the market value for three of the most well-known home health companies hit an all-time high and outperformed the S&P 500 Index.

The Stoneridge Partners Home Health Index (Nasdaq: LHCG), Almost Family (Nasdaq: AFAM) and Amedisys (Nasdaq: AMED), increased to 0.63% in May 2016, compared with April 2016, when the Home Health Index hit its previous record high.

The Home Health Index recorded a year-to-date increase of 20.35%, and is up 26.84% for the trailing 12-month period.

“Valuations are strong for the large publicly traded home health companies with multiples north of 10 on average and selling prices above one times revenue,” according to Benjamin Bogan, partner with Stoneridge Partners. “While smaller, privately held companies won’t see equal valuations, they will track those of their larger brothers and sisters in direct proportion.”

The following results were recorded for the three home health companies:• LHC Group received the biggest increase in May, with its share price growing up to 4.12%.• Addus HomeCare (Nasdaq: ADUS) saw share price drop 3.11% in May• The S&P 500 rose 1.53% in May